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Auction Flipping, and In Flip-Flops, Now Fashionable

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The latest trend to come out of the downturn, according to the Wall Street Journal is flipping, and in this case, auction flips. Investors in states like Arizona, California, Florida and Nevada, are increasingly scooping up foreclosed properties at auctions and re-selling them to buyers at a profit, reports the paper. The lead anecdote in the story involves Phoenix based- investor Jon Mirmelli, and his purchase of a brand new home in a Phoenix suburb. "After several minutes of bidding among investors and their representatives, some wearing shorts and flip-flops, Mr. Mirmelli won the home for $486,300. A week later, he agreed to sell it for $690,000 to a woman who moved in this month." While it's a dicey business, and the piece chronicles investors who've lost money on these deals, these flippers are taking advantage of the fact that banks are so busy dealing with foreclosures they're left confused about the actual worth of the home ("The banks are so screwed up," says Mirmelli). According to the CEO of research company ForeclosureRadar.com, 20 percent of homes sold in trustee sales in California last month went to investors rather than back to the foreclosing lender.
· House Flipping Makes a Comeback [WSJ]